Community Chat

[Lilith_]

Hi, I'm Ms. April( in case someone remembers) but I forgot my log in information so it was necessary to create another account. I could not wait for costumer service to respond.

The questions is explained below:

Lets say I got $1000 in California tax refund in 2010 from 2009. I itemized last year instead of the standard deduction. I know that it has to be reported to the federal gov as income because of the itemized deductions, but how much does it have to be reported?

The 1040 instructions say the following:

Line 10

You may receive a Form 1099-G ( got it)

If the refund was for a tax you paid in 2009 abd you deducted state and local income taxes on line 5 of your 2009 Schedule A, use the worksheet below to see if any of your refund is taxable.

Exception: See Itemized Deduction Recoveries in Pub. 525 instead of using the worksheet below if any of the following applies.

1. You received a refund in 2010 that is for a tax year other than 2009.

2. You received a refund other than an income tax refund, such as a general sales tax or real property tax refund, in 2010 of n amount deducted or credit claimed in an earlier year.

HOWEVER...

A notary prepared the taxes for me before and he used a different method. For example. I got a $900 refund in 2009 from 2008 state and local taxes. He deducted $900 from $1500, total taxes withheld. The new state and local taxes was $600. He then got the standard sales tax deduction, $751 from the IRS info. He then went back to the 2008 Schedule A and recalculated and this is the part where I get lost. Does this sound familiar to anyone?